Financial advisers are working to make sure clients are told about new tax evasion rules as part of a fresh crackdown by HM Revenue & Customs.
IFAs must send letters to clients by the end of next week telling them that undeclared offshore accounts could land them in trouble with the taxman.
HMRC’s message, which must be included in the letters, tells clients to “come to us before we come for you”.
The global transparency drive which is providing HMRC with data about more than 100 countries has seen IFAs and other financial institutions to try and segment their client banks to find out who may have offshore accounts and who may not.
Smith and Williamson partner Tina Riches tells the Financial Times: “We have ended up having to send them to almost everybody.”
Advisers are having to tell clients to make sure their tax affairs are up to date and warn them of penalties for undeclared assets, but some have expressed worries clients may misinterpret the HMRC warnings as accusations.
Riches says: “One of our concerns was whether it would backfire in the long run. It does smack of us doing HMRC’s work.”
Many IFAs sent the letter out well in advance however.
Sent the letter out 7th June.
— James Tarry (@Npton_Adviser) August 4, 2017
Compliance services including Banakhall and Simplybiz have also been informing IFA clients of the need to send the letter.
Sent ours in April – as recommended yonks ago by Simplybiz!
— Eugenie Cameron (@eugeniecameron) August 4, 2017
Meanwhile, there is still confusion as to how the Govt will police new rules against those who “profit from enabling abusive arrangements”, including IFAs, which could levy penalties of 100 per cent of the value of the tax avoided.